Here's why the UK's GDP result didn't 'hurt' the Pound..
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| After multiple-consecutive weeks gaining on the Euro, the Pound is set to make it 2-weeks in a row of losses.
Yesterday we saw the release of the UK's GDP in December which grew by just 0.1% as expected and the economy grew by the same margin over Q4 (0.2% forecast).
Looking deeper into the numbers and the real negative headline we see is the all-important services figure at a concerning 0% growth point. As a heavy services-based nation, the government banks on its people to spend their money to fuel the economy (clearly many didn't oblige in Q4).
EX-MPC member, Andrew Sentence, had this to say on the data 'this will be the worst decade of economic growth in 100-years' for the UK. Whilst that's hard to comprehend, I think we can all agree that it's been a particularly 'wild' 6-years to say the least..
On a brighter note and why the Pound wasn't materially 'hurt' by the result; economic growth in 2025 did rise by 1.5% and beats 2024's figure of 1.1% (as-well-as 2023's 0.4%). So the road to recovery is still clearly ongoing.
To add some context to this data-point, the UK easily beat Europe's two biggest economies; Germany (0.2%) and France (0.9%) and it was by a similar margin for 2024 too.
Whilst the data and the headlines suggest a soft growth period, analysts, economists, traders and investors all saw it coming. The much-hyped Autumn Budget brought with it uncertainty and pressure to 'do nothing and wait-and-see'. So this GDP result was a non-event as expected for Sterling (future ones will be crucial).
Upside remains extremely limited for the Pound as it remains in defensive mode.
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